Bull sailing along 200 days moving average

S&P500 today up 31 points, This is one of the reason not to hold open position at this critical juncture. I mention that the risk reward ratio for bull and bear is pretty even. And I know at this low level, bull is going to roar in one day like today.

Today market gap open, there is only one good spot you can open a long position, around 1074 which is the 38% Fibonacci retractment level from the open low 1058 to the morning high 1083. If you look at the hourly 50 moving average chart above, you can see the 50 minutes moving average act as a support to this retractment. If you open a position at this spot, you still have a nice ride for the end of the day.

1040 again prove to be a very strong support, market rebound nicely from there with today whooping 31 points. The next challenge will be the 1100 to 1110 area, it is a very tough resistance, The 200 days moving average is at 1107.61 at this time. Market retract right away when it hit the 200 days moving average  last two times. We will keep an eye on this resistance.

There are two ways we can play this market, firstly, like last two times,  place a short order by 200 days moving average, then, set a stop order 4 to 5 points away. Secondly, we can wait after market break through the resistance of 200 days moving average 1107 decisively with great volume. Wait for fibonacci retracement levels and place long order.

The market is still travels in a big trading range between 1040-1110, as long as the market is not breaking this range, we will long and short by the resistance and support.